Twitter hasn’t change into money circulation optimistic but, Elon Musk has confirmed, with a “heavy debt load” and promoting income dropping to half its typical quantity not serving to issues for the billionaire.
In March, Musk supplied a prediction that Twitter had an opportunity of being money circulation optimistic by the second quarter of 2023. In a Saturday tweet, Musk admits the micro-blogging web site hasn’t met the mark.
In response to a query about refactoring debt, Musk told followers “We’re nonetheless destructive money circulation, resulting from ~50% drop in promoting income plus heavy debt load.” Twitter must “attain optimistic money circulation earlier than now we have the luxurious of anything,” he added.
Twitter’s issues stem from quite a few points compounding the issue. For a begin, the “heavy debt load” is brought on by curiosity funds on debt Twitter took on when Musk acquired it and took it non-public.
According to Reuters, the annual curiosity funds price Twitter round $1.5 billion.
The 50% drop in advert income can be a difficulty for the corporate, which has stumbled in its relationship with advertisers post-acquisition. This era allegedly included Apple as an advertiser who apparently veered away from Twitter, however later made a return.
Musk’s feedback floor as Twitter is below assault from Threads, a rival platform that has seen appreciable short-term success. Naturally, shortly after launch, Twitter threatened to sue Meta for copying it.